remier Inn owner Whitbread has confirmed it axed around 1,500 jobs as the firm saw sales slump in the third quarter.
The FTSE 100 firm had warned that up to 6,000 jobs – around 18% of the company’s workforce – were at risk of being slashed. But today the company said it made a total of 1,500 job cuts and does not anticipate or expect any “phase two” in redundancies “in the near future”.
Boss Alison Brittain said that she was pleased to have emerged with a lower level of redundancies. She said it was in part made possible because a number of staff agreed to cut hours.
Whitbread, which raised a £1 billion in a rights issue in June, had reported revenues for the six months to September 2020 of £250.8 million, down from £1.08billion in the first half of 2019.
In a trading update released today, the firm said that in the 13 weeks to November 26 total UK accommodation sales were down by 55.2%.
Room occupancy across its 530 UK sites then fell to 31% in the five weeks to December 31 as Covid-related restrictions tightened, with total UK sales down 73.4% in the period.
The company, which said it currently has around 23,000 employees on some form of full or partial furlough, has now closed a third of its hotels due to the national lockdown, and all its restaurants.
Brittain said she “expects the current travel restrictions in the UK and Germany to remain until at the very least the end of our financial year” in February, and called for an extension of the rates and VAT relief measures beyond March 31.
She said that the firm is “working on the assumption… that there will be some relatively tight tiering in place” post-lockdown.
But the chief executive said Whitbread is well placed to take advantage of “the enhanced structural opportunities” executives are already seeing in the market as the pandemic hammers the sector – with some other operators unable to take advantage of Whitbread’s largely rent-free sites, or its facilities.
Whitbread said it has £40 million in net cash, down from a reported £196 million at the end of the first half, with cash on deposit of £814.9million and access to a £900 million undrawn revolving credit facility.
Brittain said: “It is pretty tough out there, but we are very optimistic about the future.
“We are continuing to protect our liquidity through careful management of our cash position, and we have taken action to ensure that we exit the crisis as a leaner, stronger, more resilient business.”
Analysts Greg Johnson at Shore Capital said: “Guidance on cash burn and operating metrics remain unchanged so we would anticipate the group ending the financial year with a modest net debt position.”
Shares were up 4% in early trading.